Trends Impacting the Direct Selling Industry Executive ...

U.S. CONSUMER

TRENDS IMPACTING THE DIRECT SELLING

INDUSTRY

An analysis from GfK Consumer Life (Roper Reports?)

Prepared for the Direct Selling Association | July 2016

? GfK 2016 | GfK Consumer Life

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Report Overview | Consumer Trends Impacting the Direct Selling Industry

1. Future of Shopping

2. Workforce Trends

3. Communications

4. Innovation

5. Demographic Trends

Sub trends: 1.1 In an instant 1.2 Shopping made simple 1.3 Anticipated retail 1.4 Tech-enabled intimacy

Sub trends: 2.1 Enriched expectations 2.2 Seeking separation 2.3 Peer?to-peer career

Sub trends: 3.1 Micro-engagement 3.2 Constant conversations 3.3 Emotional influence

Sub trends: 4.1 Lessen my stress 4.2 Conscious consumption 4.3 Safeguard me 4.4 Amplify my experience

Sub trends: 5.1 Aging population 5.2 Urbanization 5.3 Multi-culturalism 5.4 Changing households 5.5 Redefining families

? GfK 2016 | GfK Consumer Life

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Executive summary

Future of Shopping

? GfK 2016 | GfK Consumer Life

Future of Shopping: Need to Know

With an increasing pace of life and shrinking patience, consumers have heightened expectations of the shopping process. Direct Selling companies must continuously work to deliver on a number of trends.

In an instant | speed and accessibility matter, every aspect of the shopping experience

will need to be faster and made available 24/7. While some Direct Selling companies are at a speed disadvantage of mainstream retailers, look for opportunities to partner with players who can deliver speed/accessibility/convenience (Task Rabbit, Shyp,etc).

Shopping made simple | consumers first equate innovation with making things easier,

Direct Selling companies need to remove steps in the shopping (one click check-outs, emoji ordering) and purchasing (mobile wallet, biometrics) processes. In addition, communication has to be clear and more concise (icons, visual cues).

Anticipated retail | with greater choice but less time, consumers need do-it-for-me,

predictive solutions. The Direct Selling industry needs to leverage smart and cognitive technologies to better empower your sales force to provide anticipatory solutions and services.

Tech enabled intimacy | digital isolation has led to a yearning for more intimate and high-

touch shopping interactions. Direct Selling companies are well positioned to foster intimacy but how can technology further amplify your consumer connections (building passionate virtual tribes, harnessing virtual reality, partnering with sharing economy business models).

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Executive summary

Workforce Trends

? GfK 2016 | GfK Consumer Life

Workforce Trends: Need to Know

With a new generation of employees, technology that constantly connects us and evolving business models, entrepreneurism is rising and work is being redefined.

Enriched expectations | younger employees are placing greater importance on careers

with meaning over money. Direct Selling companies need to appeal to a more idealistic workforce, leveraging values such as helpfulness, open-mindedness, learning and knowledge. Keeping workers engaged and feeling a sense of purpose will be essential.

Seeking separation | technology has made it more difficult to separate work from

leisure. Employees today are more stressed than ever, they need creative solutions to help them separate their work from their personal time (incentives/rewards to take time off, true off the grid hours, colleague coverage plans).

Peer to peer career | new business models leveraging peer connections are driving a

renewed interest in entrepreneurship. The majority of young Americans today would like to start their own business, they are looking for control, flexibility and to follow their passion. How can the Direct Selling industry broaden its opportunity to tap into this wave of entrepreneurism (partnerships with P2P companies, unique Boomer second-career propositions, greater creative license among the salesforce, tailored opportunities for single mothers)?

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Executive summary

Communications

? GfK 2016 | GfK Consumer Life

Communications: Need to Know

Consumers are overwhelmed with information, today effective communications needs to be short, visual, relatable and ideally memorable and emotional.

Micro-engagement | communications must be tailored to consumers' waning attention

spans and quick decision-making. Direct Selling companies need to make communications succinct and as memorable as it can be (leverage visual cues where possible). In addition, a consistent brand message should be seamless across multiple screens and channels.

Constant conversations | new communications opportunities have arisen from

perpetual and real-time sharing. The Direct Selling industry should consider how best to leverage real-time broadcasting ? how can you better affect consumers in the midst of product decision making? Direct Selling companies also have an opportunity to use social and digital tools to enable better collaboration or learning/training

Emotional influence | communicating directly with consumers requires relatability,

authenticity, and an emotional connection. Younger consumers are more influenced by relatable social media stars rather than traditional celebrities, Direct Selling companies should consider how to better harness the power of their influence (or create their own social media influencers). Relatable also means more emotional, the Direct Selling industry needs to show how they can be more empathetic or provide unique sensibilities to both consultants and consumers.

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